Ottawa high-tech firm Mitel, which had threatened to sue the city over a municipal telephone contract, said Wednesday it would no longer take legal action.

The City of Ottawa originally put out a call for tender to replace its current phones with voice-over-internet protocol (VoIP) desk phones and awarded the contract to Bell and Cisco, Mitel's competitors.

Mitel, saying that the procurement process had been unfair, had then offered to give the city 10,000 VoIP desk phones — worth about $2 million — for free. In return, Mitel wanted to be given the contract to maintain the phones.

In April and May, the city put its procurement process on hold while it considered whether it could accept Mitel's offer. It decided not to accept Mitel's offer and stuck with Bell and Cisco.

Mitel representatives said they still think they have legal grounds to challenge the way the contract was awarded but that the company won't take legal action because it doesn't believe it is in the best interest of the company, taxpayers or the city.